kirkland washington homes for sale

How Good Does Your Credit Have to be When Buying a Home?

Do you have to have perfect credit? Or can anyone purchase a home?buying Kirkland real estate

A decade ago, you needed very good credit to apply for a home. And then you needed a substantial down payment just to afford one. Then as the market got better and better, lenders started easing up on the requirements needed to buy a home and more and more people were becoming home owners.

What are Lender's looking for?

Typically lenders look at your debt to income ratio and determine about 28% of your income can go toward a mortgage. But more and more mortgage brokers were finding creative ways around lenders and letting home buyers buy a home with up to 50% of there income and sometimes even more.

This led to the crux we are in now. Where so many people bought homes they really couldn't afford and now are foreclosing on them when the mortgage rates jump and subprime mortgages are due. This means people that once had a $1000 a month mortgage all of a sudden now have a $2000 a month mortgage payment.

Knowing the facts about the system can really help put you in a better position to buy Kirkland real estate and being educated helps in the long run to be aware of the economy and where your income may be headed.

Credit Score

Typically right now, lender like a credit score of around 650 or higher. Some institutions are looking for much higher credit scores but you may get a better rate with those that are more strict. It pays to shop around, not only for the best rate, but the best service, explanation, fees and points costs. Weigh all the costs before deciding. One lender may give you a great rate but charge a lot of fees. Balance those fees against what you would be saving on the rate and see if it's worth it.

If you have decent credit, have kept up on your payments of credit cards, rent, mortgage, whatever, then you probably have a good shot at obtaining a mortgage. Give us a call today to find out more about buying Kirkland real estate.